I am trying to figure out the best way to record service/repairs and inventory. I have three main issues to solve: consistency among the 25+ people who enter information into QB, efficiency of entry, and recording inventory/re-order points.
Here's the scenario: it's a medical supply company, but we'll pretend it's a vacuum repair/retail shop because that might be easier.
We repair and sell vacuums and parts of vacuums. Typically, someone ships us their unit. Receiving enters it into QB as a sales order and sends a confirmation email to the customer. Our repair facility evaluates it and makes any necessary repairs. A customer service person enters the repairs into a Sales Order and emails a quote to the customer. The repaired unit sits on a WFA shelf waiting for payment. When we receive payment, we invoice it and mail it back to the customer. To get parts for the vacuums, sometimes we go to a vendor and purchase parts. These go into inventory. Equally as often, we will by a lot of inoperable vacuums and part them out ourselves or repair them and sell them whole. Some of these parts are sold to customers directly, others are used for future repairs. These inoperable vacuums sit on a shelf, whole and untouched, until we either need to repair one to sell it as a unit or need to part it out to repair a customer's vacuum.
Example: we purchase 10 blue vacuums that are not working for one reason or another. Some have a broken belt, some have a fried power board, some don't have a power cord. In addition, we have several containers on our shelves with like-new belts, boards, and cords respectively that are ready for either resale or repairs. We have these manufactured for us.
A customer sends us a red vacuum and asks us to convert it to blue. We take all the blue parts off a dead unit we purchased and exchange them out for all the red parts on the customer's at essentially no cost to us. We also find that the customer needs a new belt and the power cord is frayed. So we offer to replace those as well. The entire repair is a flat rate $100. Until we receive payment from the customer, their unit sits with the repaired parts in it on our WFA shelf. If they choose not to have it repaired, which is very rare, we will simply replace the bad parts they sent it with and put our good parts in the appropriate container on the shelf.
Question: should the blue parts, cords, and boards be entered into inventory somehow when we purchase the lot of broken, blue vacuums? That would take quite a bit of work as we would have to part each item out, record it, and assign each item a monetary value (?). We are actually working with much larger numbers and units that have dozens of parts/ea. Alternatively, we could consider the parts as COGS, but then our inventory of the parts would be off while the customer's vacuum is repaired but awaiting approval/payment. We could also make it a build assembly, but then taxes would be screwy because we would be taxed for selling an item (which has sales tax) instead of offering a repair service (which has no sales tax for us). In addition, because we sell the individual items (the belts, cords, boards, and "blue parts"), we would want those to be logged in QB as inventory, if possible. Until now, we have saved these parts as non-inventory parts, but now we are getting into supply issues. Some of our parts are taking up to 4 months to be manufactured and shipped to us. So we have to make sure we keep a pretty high reorder point. Ideally, I would like the invoice to reflect a vacuum repair as a grouped item that has underneath it our most common replacement parts: cords, boards, and belts. When we record the repair in a sales order, it removes the parts from inventory, but sells it all as a repair service. I would like to know how many of each kind of repair we are doing, and I would like to be able to better track when we need to re-order parts As it is now, we are only able to record the model number of the "vacuum" that we repaired, without knowing what kinds of repairs we do most often to each model. Of course, each model has its own unique parts, and we might not know how often we replace a particular belt on a particular model. We simply know how often we repair that model of vacuum.
Maybe I should do a multiple inventory site option with two "bins" in QB: one for whole units and one for inventoried parts purchased? Yikes, any help would be much appreciated because I can't think of an elegant solution.
You quite have a situation going on with your inventories. Thanks for the detailed explanation. I like it that you use a vacuum as an analogy. Let's get started.
The catch here is you're buying inventories out of an assembled item (broken vacuum). If you really need to track the individual parts, you'll start doing that at the time purchase, which means you'll have to individually reflect them on your purchase transactions. And yes, I can imagine that this will be a lot of work on your end, but it's necessary so you can set a reorder point and track the quantity properly.
About exchanging items and only charging a flat rate of $100 for repair, you can invoice your customer with a service item without including the inventory parts on your sales transaction. What you'll want to do with them is to adjust their inventory count. This way, they won't reflect on your sales and tax reports.
Let's say, Customer A with a red vacuum wanted to change the parts to blue. Give them an invoice for the service charge and decrease and increase the count of your blue and red items respectively.
Click the Inventory menu.
Choose Adjust Quantity/Value on Hand.
Choose your adjustment account.
Enter the items with a negative (decrease) and positive (increase) number.
(Optional) Tag the customer's name and enter a memo.
Click Save & Close.
As for repairing models and tracking the parts, you can group them into an assembly item. That way, their quantity will reduce when you build the assembly. Then, create a sales order with the assembly item and the service item when you do the repair job.